USPS announces same-day service test

Friday, December 14, 2012

The U.S. Postal Service will start a same-day test pilot as early as the middle of next week in San Francisco, allowing customers to purchase goods from online retailers and have them delivered hours later.
Metro Post, a collaboration with up to 10 online retailers, will allow consumers to order goods as late as 2 p.m. for same-day service. The first partner retailer will be announced next week, just in time for the holiday season.
It has been reported that the program will commence Monday, but USPS spokesman John Friess said it most likely won’t happen because Dec. 17 is the Postal Service’s busiest day of the year. His best guess is Wednesday.
“We’re ready to go — it’s more along the lines of dotting the “I”s and crossing the “T”s with the partner retailer to get them on board and to get them ready,” he told American Shipper.
The year-long test phase will initially be capped at 200 packages per day, but officials have the flexibility to adapt the program as necessary by adding a larger handling capability, terminating the program altogether or even bringing it out of the test phase early. During the test, postal workers will hit the streets of San Francisco by 4 p.m. each day to deliver recently ordered goods. Cost of the service hasn't been announced.
FedEx and UPS already offer same-day service, and retailers like eBay and Walmart are even getting in on the shipping game.
“It’s what’s next. The explosion of e-commerce is such that we are in a world of instant gratification,” Friess said. “We see this as an opportunity to leverage our infrastructure because we already deliver to every address. We can roll this out with very limited impact on our current operations.”
Officials chose San Francisco for the testing phase because of its small area and large population. Friess admits that officials are already targeting other cities with a similar mix population density. Any expansion beyond the initial test would require approval by the Postal Regulatory Commission.
“We’re confident that we have the right elements in place that this will prove successful and that it’ll become a product down the road that many more customers can take advantage of,” he said.
The Postal Service recently announced it has seen a 20-percent growth during the holiday season when compared to 2011 and is up 10 percent year-over-year so far in 2012. But the company is also in the middle of a makeover, of sorts, that is ultimately expected to save it $1.2 billion. By February, officials expect to have closed 140 locations around the country. An additional 89 locations will close, as needed, by February 2014. USPS announced the changes at a time it was projecting a $14 billion net loss for fiscal-year 2012; that number has since increased. Friess said this new program, if successful, will help the USPS grow.
“Our core goal is really about developing those core products that will help us realize financial sustainability,” he said. “We can’t sit back. Our financial situation is in the rearview mirror. We’re looking forward.” - Jon Ross